Giving (tax effectively)! – The holiday season is a great time to give something back to those less fortunate than you.
There are many charities that run special Christmas programs, and if you are stuck for a gift idea, making a charitable donation in someone’s name is a fantastic solution.
On an even better note, charitable donations can get you some great tax breaks. We have compiled this list of how donations are treated for tax purposes to give you a little guidance this season:
It has to be a donation
If you receive a material return for your charitable payment, then it cannot be claimed as a tax deduction. Material returns include items such as raffle ticket and merchandise. You should also make sure to keep all of your receipts!
The charity must be registered
In order to be eligible for a tax deduction the charity must have deductible gift recipient status (GRS) from the ATO, so always confirm this before making a donation.
Giving a donation as a gift
When it comes to giving someone a donation to a charity as a gift, the tax implications can get tricky. Many of the major charities offer pre-packaged charitable gifts for you to give to someone, and these will often specify whether or not you can include it as a tax deduction. If you are considering a sizeable donation in someone else’s name, you should consult your accountant about tax implications.
Call (02) 4926 2300 or email us.
The accounting team here at Leenane Templeton are here to help with any questions you may have about Giving (tax effectively)!